ITO, New Delhi V. Shri Praduman Kumar Jain, New Delhi

ITA 2040/DEL/2009

• Counselvise Citation: 204020114 RSA 2009
• Duration Of Justice: 4 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 15-10-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 14-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Section: 139

Judgement Text

ITA NO.2040/DEL/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F : NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.2040/DEL/2009 ASSESSMENT YEAR : 2001-02 ITO, WARD 17 (1), NEW DELHI. VS. PRADUMAN KUMAR JAIN, CA/5B, MUNIRKA, PHASE II, NEW DELHI. PAN : AADPJ9834C ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI S URENDER KUMAR, CA DEPARTMENT BY : S HRI SATPAL SINGH, SR. DR ORDER PER A.D. JAIN, JUDICIAL MEMBER: THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 2001-02 AG AINST THE ORDER DATED 02.03.2009, PASSED BY THE CIT (A)-XIX, NE W DELHI, DELETING THE PENALTY OF ` 3,67,324/-, IMPOSED ON THE ASSESSEE U/S 271 (1)(C) OF THE IT ACT. 2. AN APPLICATION FOR ADJOURNMENT HAS BEEN FILED BY THE ASSESSEE FOR THE REASON THAT THE LD. COUNSEL FOR THE ASSESSEE IS OUT OF STAT ION. HOWEVER, FINDING THAT THE MATTER CAN BE PROCEEDED WITH AS SUCH , THE APPLICATION FOR ADJOURNMENT WAS REJECTED AND THE MATTER IS BEING PROC EEDED WITH ON HEARING THE LD. DR. 3. THE FACTS ARE THAT THE ASSESSEE, IN THE STATUS OF INDI VIDUAL, FILED A RETURN OF INCOME FOR ASSESSMENT YEAR 2001-02 ON 30.10.2 001 DECLARING A ITA NO.2040/DEL/2009 2 LOSS OF ` 6,62,415/-. THE ASSESSMENT U/S 143 (3) WAS COMPLE TED ON 09.03.2004 DETERMINING THE TOTAL INCOME AT ` 67,87, 196/-. CONSEQUENT TO THE ORDER DATED 17.02.2006 OF THE TRIBUNAL IN ITA NO.20 62/DEL/2005, REASSESSMENT U/S 143 (3) R.W.S. 254 WAS PASSED ON 07.12.2006 DETERMINING THE TOTAL INCOME AT ` 17,14,193/-. ON REASSESSMENT ON 07.12.2006, THE ASSESSING OFFICER PASSED A PENALTY ORDER U/S 271 (1)(C) ON 28.06.2007 LEVYING A PENALTY OF `3,67,324/-. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT (A) DELETED THE ADDITION. THE SEQUENCE OF EVENTS RELE VANT TO THE CASE AS AVAILABLE FROM THE IMPUGNED ORDER, ARE AS FOLLOWS:- SL.NO. DATE PARTICULARS 1. 30.10.2001 FILING OF RETURN U/S 139 WITH RETURNED INCOME NIL WITH ITO WARD 48(2) 2. 12.12.2002 ISSUE OF NOTICE U/S 143 (2) BY THE ITO WARD 48(2) 3. 20.02.2004 FILING OF REVISED COMPUTATION BY THE ASSESSEE WITH TAXABLE INCOME OF RS.17,14,193/- AFTER INCLUDING CAPITAL GAIN OF RS.23,76,608/- AND PAYMENT OF TAXES THEREON. 4. 27.02.2004 ISSUE OF DETAILED QUESTIONNAIRE BY ITO WARD 17(1) 5. 09.03.2004 ASSESSMENT ORDER U/S 143 (3) PASSED BY ITO, WARD 17(1) AT RS.67,87,196/- 6. 17.02.2006 ITAT PASSES ORDERS AND RELIEF TO ASSESSEE MATTER PARTLY REMANDED BACK TO A.O. 7. 07.12.2006 ASSESSMENT ORDER PASSED U/S 143 (3) AND 254 BY ASSESSING AUTHORITY AT RS.17,14,193/- 8. 28.06.2007 PENALTY OF RS.3,67,324/ - U/S 271 (1)(C) IMPOSED BY A.O. 4. THE REASONS FOR INITIATING PENALTY PROCEEDINGS IN R ESPECT OF CAPITAL GAIN OF ` 23,76,608/- DECLARED BY THE ASSESSEE IN THE REVISE D COMPUTATION OF INCOME, ARE AS FOLLOWS:- IN THE PRESENT CASE THE FACTS AND CIRCUMSTANCES CLEARLY REVEAL THAT THE OFFER OF TAX ADDITIONAL INCOME WAS MADE SUBSEQUENT TO ENQUIRIES BEING MADE BY THE A.O. THE MATERIAL AVAILABLE ON RECO RD TO CLEARLY LEADS TO THE CONCLUSION THAT THE ASSESSEE HAD CONSCIOUSL Y CONCEALED HIS INCOME FROM LONG TERM AND SHORT TERM CAPITAL GAINS. FURTHER THE ASSESSEE IN HIS REPLY FURNISHED IN RESPON SE NOTICE TO U/S 271 (1)(C) HAS NOT FURNISHED ANY EVIDENCE TO SUPPORT H IS CONTENTION THAT THE OMISSION TO DECLARE THE CAPITAL GAINS IN HIS ORI GINAL RETURN OF ITA NO.2040/DEL/2009 3 INCOME WAS INADVERTENT. NO SUCH EVIDENCE HAS BEEN FU RNISHED BY HIM EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE REFORE, THE EXPLANATION FURNISHED BY THE ASSESSEE CANNOT BE ACCEPTE D TO BE BONA FIDE. IN CONTRAST THE ASSESSING OFFICER HAS CLEARLY B ROUGHT IT ON RECORD THAT THE ASSESSEE HAD CONSCIOUSLY NOT DECLARED HIS INCO ME FROM CAPITAL GAINS DURING THE YEAR UNDER CONSIDERATION. THEREFORE, THE ASSESSEE IS CLEARLY HIT BY THE PROVISIONS OF SECTION 271 (1)(C). THIS VIEW DERIVES SUPPORT FROM THE DECISION OF THE HONBLE GUAHATI HIGH C OURT IN THE CASE OF G.C. AGGRAWAL VS. CIT 102 ITR 408 WHICH HAS BEEN AFFIRMED BY THE HONBLE SUPREME COURT 186 ITR 571. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES I HOLD THE ASSESSEE LIABLE FOR PENALTY U/S 271 (1)(C) OF THE IT ACT, 1961 FOR CO NCEALING HIS INCOME FROM SALE OF SHARES. THE MINIMUM AND MAXIMUM PENALTY WORKS OUT OF RS.3,67,324/- AND RS.11,01,972/- RESPECTIVELY AS WO RKED OUT AS UNDER:- 5. THE LD. DR HAS CONTENDED THAT THE LD. CIT (A) HAS ERRED IN DELETING THE PENALTY CORRECTLY LEVIED ON THE ASSESSEE. 6. HOWEVER, UNDISPUTEDLY, THE REVISED COMPUTATION WAS FILED BY THE ASSESSEE ON 20.02.2004, I.E., BEFORE ISSUANCE OF GENERAL SHOW CAUSE NOTICE/QUESTIONNAIRE BY THE ASSESSEE. THEREFORE, UNDOUBT EDLY, THE AMOUNT OF ` 23,76,608/- WAS VOLUNTARILY DECLARED BY THE ASSESSEE UNDER THE HEAD OF CAPITAL GAIN BEFORE ANY DETECTION OF CONCEALMENT BY THE DEPARTMENT, AS CORRECTLY OBSERVED BY THE LD. CIT (A) AND THEN, THIS AMOUNT WAS VOLUNTARILY OFFERED FOR TAXATION BY THE ASSESSEE BEFORE ANY DETECT ION OF SUPPRESSED/CONCEALED INCOME. AS AGAINST SUCH DECLARATION BY THE ASSESSEE ON 20.02.2004, THE GENERAL SHOW CAUSE NOTICE WAS ISSUED BY THE ASSESSING OFFICER ONLY ON 26.02.2004. THE LD. CIT (A) HAS SPECI FICALLY MENTIONED IN PARA 15 OF THE IMPUGNED ORDER THAT HAVING GONE THROUGH T HE RECORD, THESE DETAILS/DATES WERE FOUND TO BE CORRECT. FURTHER, THE LD. CIT (A) HAS ALSO OBSERVED THAT VIDE ORDER SHEET ENTRY DATED 25.02.2004 TOO, THE ASSESSING OFFICER MENTIONED THAT THE REVISED COMPUTATION WAS FI LED ON 20.02.2004. IN THESE FACTS, THE LD. CIT (A) IS CORRECT IN OBSERVING TH AT SINCE NO SHOW CAUSE NOTICE WAS ISSUED BEFORE 20.02.2004, THE REVISED COMPUT ATION FILED BY THE ASSESSEE ON THE SAID DATE CANNOT BE SAID TO DECLARE ADDIT IONAL INCOME OF THE ITA NO.2040/DEL/2009 4 ASSESSEE AFTER DETECTION OF CONCEALMENT BY THE DEPARTME NT. ALSO, THE INCOME DETERMINED FINALLY VIDE ORDER DATED 07.12.20 06, PASSED U/S 143 (3) READ WITH SECTION 254 OF THE ACT, IS, AS OBSERVED BY THE LD. CIT (A), AS MUCH AS THAT SHOWN IN THE REVISED COMPUTATION FILED BY THE ASSESSEE ON 20.02.2004 AND, THERE IS NO ADDITION TO THE INCOME SHOWN IN THE SAID REVISED COMPUTATION OF INCOME OF THE ASSESSEE. AS FOR THE ASSESSING OFFICER, HE HAS NOT BROUGHT ON RECORD ANY MATERIAL OTHER THAN THE R EVISED COMPUTATION FILED BY THE ASSESSEE, TO SUPPORT THE PENALTY LEVIED. 7. IN THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT (A) HAS CORRECTLY FOLLOWED AVR PRA SAD VS. ITO 97 ITD 325 (HYD), AS PER WHICH DECISION, PENALTY CANNOT BE LEVIE D IF ANY INCOME IS VOLUNTARILY DECLARED BEFORE ANY CONCEALMENT IS DETEC TED. AND NOT ONLY THIS, UNDISPUTEDLY, THE ASSESSING OFFICER HAS NOT FOUND THE E XPLANATION FURNISHED BY THE ASSESSEE TO BE FALSE, AS NOTED BY THE LD. CIT (A) IN PARA 18 OF THE ORDER UNDER APPEAL. IT IS A MATTER OF RECORD THAT CE RTAIN TRANSACTIONS RESULTING IN CAPITAL GAINS HAD ESCAPED ATTENTION OF THE ASSESSEE AN D THIS MISTAKE WAS RECTIFIED AS SOON AS IT WAS REALIZED, BY FILING THE REV ISED COMPUTATION, DECLARING THE MISSING TRANSACTIONS. INDEED, IT IS WELL SETTLED THAT PENALTY CANNOT BE LEVIED IF ANY BONA FIDE MISTAKE IS INVOLVED , AS HELD IN: I) K.C. BUILDERS VS. CIT (2004) 135 TAXMAN 461 (SC); II) DILIP N. SHROFF VS. JCIT, MUMBAI; III) CIT VS. ASHOK TAKER (2008) 170 TAXMAN 471 (DEL); IV) CIT VS. RAJIV GARG (2008) 175 TAXMAN 184 (P&H); & V) T. ASHOK PAI VS. CIT (2007) 161 TAXMAN 340. 8. NO DECISION TO THE CONTRARY HAS BEEN BROUGHT TO OU R NOTICE. 9. IN VIEW OF THE ABOVE, FINDING NO MERIT THEREIN, THE GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT BY WAY OF THE GROUND OF APPEAL RAISED STANDS REJECTED. ITA NO.2040/DEL/2009 5 10. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 20.12.201 3. SD/- SD/- [ G.D. AGRAWAL ] [A.D. JAIN] VICE PRESIDENT JUDICIAL MEMBER DATED, 20 TH DECEMBER, 2013. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.